Economic development efforts in Aurora have resulted in a $1.2 billion increase in assessed value of property in the city since 2011, a report from the Mayor’s Office of Economic Development said.
That increase in assessed value has created a steady decline in the city’s property tax rate since 2014, from a high of more than $2 for each $100 in assessed value, to around $1.77 this year, the report said.
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“We basically have the same tax rate as in 2011,” said Chris Minick, the city’s finance director.
That same rate is generating more than $80 million in tax revenue for the city, up from the $60 million it generated in 2011, due to the increase in assessed value, Minick said.
City officials said the climb in assessed value is attributable to the economic development that has gone on in the city. They cited some specific projects, such as rehabilitation of the former Copley Hospital campus, the Hobbs Building, the Terminal Building, the Keystone Building, and the former West Aurora Administration Building at 80 S. River St.
Alex Alexandrou, the city’s chief administrative officer, said in all those cases – with the exception of the Keystone Building – the historic properties were going to be demolished if they were not redeveloped. In the case of the Keystone, the building was “woefully underused,” Alexandrou said.
In all those cases, the city did redevelopment deals that involved incentives for the developers from the city. Alexandrou said in all the cases, “data and the evidence” shows that the city got a return on the investment of somewhere between 3.6% and 6% in more tax revenue, or money paid back, in the case of loans.
He pointed particularly to the Copley property, which has been redeveloped into housing for seniors, and for developmentally disabled adults, into other medical uses, and into a new administration building for the East Aurora School District.
The city faced a demolition project for that property of up to $12 million if the redevelopment had not been done. The city put a total of about $18 million of incentives into the about $125 million overall project, and is getting back about a 5% return on investment, Alexandrou said.
“People need to understand what the alternative universe would have been,” he said. “We could have ended up with a $12 million empty lot.”
Alexandrou also called the renovation of the historic Hobbs Building downtown “a spectacular success.”
The apartments renovated are 100% leased, and now there are three restaurants coming into the first floor, he said.
Alexandrou said on retail properties, the city is looking at returns on investment as low as 6%, but as high as 28.6%. Those deals include the renovations that have resulted in Altiro and Craft Urban, both of which are exceeding expectations.
In the third year of its redevelopment deal, Altiro emerged with $1 million in revenues in the last year, and Craft Urban has seen $1.8 million in revenue, almost twice what was projected as part of the redevelopment deal.
The city also is looking at about a 6% return on investment from Stolp Island Social, which is in a city-owned space in the Arts Center next the Paramount Theatre.
“Everything we’re doing, we get a return on,” said David Dibo, the city’s economic development director. “We do not do a deal unless we can show a positive return on investment.”
Dibo and other city officials gave their report at Tuesday’s City Council meeting, timed, they said, to try to counter what Alexandrou called “misinformation” that has been circulating on social media.
Dibo said with return on investment of about 5% for the developers involved, it shows success, but that the return is “relatively low.”
“No one is walking away with a lot of money,” he said.
Dibo also outlined a long list of criteria the Economic Development Office uses to qualify a deal as part of the report. He added that his office is transparent, and is planning open houses in the future where members of the office will discuss details of efforts with interested residents.
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